Prince Harry and co-claimants ordered to pay £9.5m in Daily Mail legal costs

Prince Harry and six other prominent figures have been ordered to pay an initial £9,544,355, equivalent to $13 million, in legal costs following their failed High Court privacy lawsuit against Associated Newspapers Limited (ANL), the publisher of the Daily Mail and the Mail On Sunday. The ruling marks a severe financial blow for the claimants, who could ultimately face tens of millions more in liabilities stemming from the litigation.

The high-profile group — which includes singer Elton John, anti-racism campaigner Doreen Lawrence, film producer David Furnish, actors Sadie Frost and Elizabeth Hurley, and former politician Simon Hughes — sued the publisher over allegations of unlawful information-gathering, such as bugging cars, obtaining private records, tapping into phones, and hiring private investigators. ANL vehemently denied the claims throughout an 11-week trial in London earlier in the year, culminating in Mr Justice Nicklin dismissing all 97 claims in a judgment delivered on July 7.

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Following the substantive dismissal, the legal battle shifted to a two-day hearing over costs, where the court learned that ANL's total defense expenses surpassed £34 million, with figures cited in court reaching upwards of £34.5 million or $47 million. In a judgment on Friday, Mr Justice Nicklin ordered the initial contribution to be paid by August 28. The judge ruled that ANL’s costs should be assessed on an indemnity basis, a stricter standard highly favorable to the publisher that removes the requirement for costs to be proportionate and disapplies court-approved budgets.

The judge delivered an excoriating critique of the claimants' legal strategy in a 44-page ruling, pointing to the speculative and substantially inferential nature of the litigation and the failure to voluntarily withdraw serious allegations of criminality and impropriety after their evidential foundation crumbled. Central to this criticism was the reliance on testimony from private investigator Gavin Burrows, whose initial claims formed a plank of the lawsuit before he retracted them. Burrows later branded the proceedings a sham and stated he contacted the publisher as soon as he was aware Baroness Lawrence had been brought into the case, while also pointing to evidence supplied by convicted phone hacker Graham Johnson. Mr Justice Nicklin stated that maintaining these grave allegations when the evidential position changed was unreasonable to a high degree and described the litigation as conceived and pleaded on an unjustifiably wide canvas.

While acknowledging that ANL's total costs claim was excessive and largely unexplained, the judge declined to impose a cost cap that would have limited the claimants' liabilities. Although the group maintained insurance policies covering a combined £16.2 million, the indemnity ruling exposes them to a potential overall liability of around £18 million to £25 million beyond their insurance cover, leaving a substantial shortfall to be paid out of pocket. Nicholas Bacon KC, representing Prince Harry and the other claimants, had warned in written submissions that an indemnity assessment could lead to them being without enough insurance cover because the publisher's costs exceeded its approved budget by more than £18.6 million. David Bailey-Vella, chairman of the Association of Costs Lawyers, stated that the ruling could not have gone much worse for Prince Harry and his co-claimants, noting that the costs process could take several years without a settlement.

Conversely, an ANL spokesperson heralded the decision as another overwhelming victory for the Mail and its journalism, describing the judgment as a devastating critique of an attempt to destroy a newspaper and the reputations of its journalists, editors, and executives. The publisher added that the outrageous claims should never have been brought and that their pursuit raised disturbing questions about the conduct of elements of the legal profession. In a joint statement, the claimants expressed their disappointment, stating they came to court seeking justice and accountability but received neither. Simon Hughes told the BBC he was disappointed and surprised that ANL's recoverable costs had not been limited.

The financial penalty compounds a tumultuous period for the Duke of Sussex, whose broader legal campaign against British tabloids has yielded mixed results. His defeat against ANL brought an end to a trio of lawsuits accusing tabloid publishers of using unlawful tactics, following a 2023 victory against Mirror Group Newspapers for widespread and habitual phone hacking, and a settlement last year involving an unprecedented apology and substantial damages from Rupert Murdoch's flagship UK tabloid, The Sun. Prince Harry has previously stated that his litigation was a primary source of his falling out with his father, King Charles III, and his brother Prince William, and part of a larger quest to reform the news media that he blames for the death of his mother, Princess Diana, in a 1997 car crash in Paris, and for attacks on his wife that led the couple to abandon royal life and move to the United States in 2020.

This latest legal setback arrives concurrently with news regarding his personal life. It was made public on Wednesday that Prince Harry and his wife, the duchess of Sussex, are moving back to the UK after living in California for more than six years following the Megxit crisis, with plans to relocate back later this month to live in a non-royal residence outside London.

Key Developments and Timeline

• July 7: Mr Justice Nicklin dismisses all 97 privacy claims brought against Associated Newspapers Limited, finding a shortage of evidence.
• August 21: Mr Justice Nicklin issues a 44-page ruling ordering an initial payment of £9,544,355 ($13 million) on an indemnity basis due to unreasonable conduct by the claimants.
• August 28: Deadline for the claimants to make the initial £9.5 million payment to ANL.
• October 2: Deadline for the claimants to file any bids for permission to appeal the substantive judgment or the costs ruling.

Further litigation and hearings before specialist costs judges will ensue if both sides fail to negotiate the final overall payout, while individual claimants such as Simon Hughes weigh whether to pursue appeals against decisions in either the substantive judgment or the costs ruling.